Zimbabwe in crisis, 2% tax on electronic money transfers backfires

Economic crisis has hit Zimbabwe forcing Mthuli Ncube’s Ministry of Finance to announce a 2 percent increase on electronic money transfers last week.

The tax has been imposed in a bid to curb some of the challenges that have rocked Zimbabwe in recent weeks, the main ones being fuel shortages and medical drugs.

This is happening because of the scarcity of foreign currency in the financial market, making importers of fuel and drugs affected, hence failure to provide their products in a required quantity.

However, according to NewsDay publication in Zimbabwe, Minister of Finance reviewed the tax on Friday sparing transactions below $10 and capping the tax at $10, 000.

Over the weekend, people from Zimbabwe were forced into panic buying of basic goods like bread, cooking oil, soap, sugar, in fear that this week they might be more expensive or out of stock.

A similar scenario happened in Malawi in 2012 during late President Bingu Wa Mutharika’s regime due to a variety of economic and political factors, causing fuel shortages, which led to a rise in the cost of living for Malawians.

Meanwhile, Zimbabwe Congress of Trade Union (ZCTU), through its president Peter Mutasa, has called for nationwide demonstrations on Thursday (tomorrow), in protest of the imposed tax, claiming it is illegal, as it appeases the rich and ignores the poor.